Commercial advertising ("commercials") create the revenues that sustain the content provider's operation. Commercials provide a host of special problems based on the nature of the media.
Specifically, media such as television and radio sell specific time slots for playing of the advertisement. The content provider, e.g., the television station, sells a time slot in which a commercial will be played.
This arrangement creates special considerations. The station is selling time. Once that time passes, the value of the service goes to zero. Similarly, after the commercial plays, there is no way of unplaying it. This compares with other sellers of commodities, who often have the option to repossess the chattel being sold.
Because of these considerations, most stations require that payment for booking be entirely in advance, except for the best, i.e. the most creditworthy accounts.
The most typical advertisement includes regular television commercials, typically thirty to sixty seconds in length, which are aired during breaks in commercial television programs. The so-called infomercial is also a television commercial advertising, but is typically much longer in length, e.g. between four minutes and one hour.
With the exception of certain public service-oriented advertising, all commercials are paid for by a sponsor. The billing is done on a per-piece basis, based on the time and likely audience for the commercial. This pricing is a multi variable determination. For example, a one-minute commercial aired during the Super Bowl is considerably more expensive than a one-minute commercial aired at 2:00 A.M. Therefore, it is extremely important that the time when the commercial airs is the same time as what was paid for. However, it is not always a routine matter for the station to determine this.
A nationwide television commercial is often received by the television station, e.g., via its satellite transponder hook-up. A "nationwide" television commercial is often included as part of the nationwide program. In this case, the central network provider provides both the television program and some of the commercials to be aired everywhere. However, other breaks within the commercial television program may be filled by "local" commercials, those that are aired only locally. These local commercials are typically produced locally, recorded and stored at the television station.
Nationwide programming time schedules for the affiliates are sent to local television affiliates from the network. This includes a schedule describing open times for local advertisement station identification and other time slots that the station can sell locally. Each half hour slot generally has two programming slots of 12 minutes duration with commercial slots in between. The national schedules also often leave half hour time slots open for infomercials or public access programming. Television guides often show these slots as "paid programming".
Depending on various circumstances, the local television station may have the option to override the national commercial. At times, the local station overrides the national commercial even when such an override is not authorized. This provides a significant problem of tracking which commercials have been shown and when.
The advertiser may pay in advance for a half hour to be aired at 7:30 P.M., but the commercial actually airs at 10:00 P.M. These times may have radically different prices. The price of a commercial aired at 9:02 P.M., which is after the show that aired in the 8:30 to 9 time slot can even be significantly different from the price of a commercial aired at 8:58 P.M., which is during that time slot. The advertisers are, therefore, extremely interested in knowing the precise time of airing. However, the varied nature of the advertising system, and especially the television system often makes it difficult to determine precisely when the commercial will be aired.
Typically, the advertising agency acts as an intermediary between the actual advertisers and the television station. The advertiser wants their advertisement to air at certain times on certain channels and in certain events. For example, a toy company might want their advertisement to air during the Sunday morning cartoons. Airing the advertisement during Sunday football would not reach the desired audience.
Special prices are often negotiated based on whether the advertisement is in prime time, off prime time, holidays, weekends, special events or the like.
At some time before the actual airing of the broadcast, the station produces an actual program schedule which show the programming segments it will play or receive, as well as all commercials, infomercials and station identifications. Each of the latter are stored on tape which are pulled from the video library by a station engineer. Commercials and infomercials are usually manually played by the station engineer who initiates the proper tape based on a schedule in a specified time slot. The engineer keeps manual records of what has actually been done and the billing of commercial time is carried out based on these records.
The actually-played commercials are often sampled by third party organizations who employ people to watch and keep track of television commercials which are played. These people, however, cannot watch every single television commercial, and therefore only act as a sampling mechanism to determine a percentage of correct reporting by the television station and advertising agency.
One other means of verification of commercial airing digitizes one or several frames of the commercial. Then the physical airing is taped and compared to the frames. This still requires a television to receive the broadcast and a physical comparisons of the frames. This method is inaccurate and again based on statistical sampling.